Tag: Antitrust

China has cleared Google’s acquisition of Motorola on the condition that Android will be free and open for at least another five years. With the acquisition of Motorola, Google would have both, a specialized Android related hardware segment and the Android software under its control. Seeing this, China raised its eyebrows and refused to clear the deal until Google agreed not to create a lock-in situation in the Android market.

China has a number of low-cost Android device manufacturers who rely on the Android ecosystem created by the Open Handset Alliance. A few years from now, if Google starts giving Motorola priority over other handset manufacturers, it might create an antitrust situation. China took good care to make sure that this does not happen, though it is interesting to note that Google never suggested that it would do so in the first place. Truth be told, Google does not even have the power to do so, because Android is managed by the Open Handset Alliance and Google is only the largest contributor. Then why did China go through all this trouble?

Perhaps China was skeptical that Google might try to address the Android hardware fragmentation problem by monopolizing the market, now that it controls both the software and a big chunk of the hardware. Whatever may be the case, the good news is that Android has always been free and will be free for the next five years.

Given the price of this deal, which stands at 12.5 billion USD and is larger than all other Google acquisitions combined, Google is placing a huge bet on Motorola Mobility and it will be interesting to see what synergy this acquisition creates.

Google’s legal woes just keep getting worse. After drawing the ire of American and European regulatory bodies, Google is now in hot water in India. According to WSJ, Competition Commission of India has initiated an antitrust probe into Google’s online advertising practices. Competition Commission is an Indian regulatory body responsible for enforcing The Competition Act (2002). It had earlier sued Apple for following a restrictive distribution model.

The initial target of the probe will be AdWords – Google’s automated service for selling ads that are served by its AdSense network. The instigating factor for the investigation is most probably a complaint by Consim Info Pvt. Ltd., which runs several matrimonial services including Bharatmatrimony, TamilMatrimony, and BengaliMatrimony. Consim believes that Google had engaged in discriminatory and retaliatory practices. It is currently suing Google in Chennai High Court. Earlier, Consumer Unity & Trust Society (CUTS) had urged Competition Commission to investigate potential anticompetitive conduct of Google in the Indian internet, e-commerce market, online advertising and related markets.

Google is already in some trouble in India. It is currently facing criminal charges for failing to “adequately” censor itself. Back in February, Google also received a foreign exchange violation notice from the ED (Enforcement Directorate) for alleged irregularities in transfer of funds to its foreign entities. So far, Google has declined to officially respond, claiming that it is yet to be officially notified about the investigation.

On top of that, today the European Commission has started a formal antitrust investigation against Samsung. EU regulators will be investigating whether Samsung broke antitrust rules by seeking injunctions against rivals like Apple. Samsung had apparently pledged that it would license its essential patents on fair, reasonable and non-discriminatory (FRAND) terms.

Despite the fact that the patent lawsuits by Samsung against Apple were rejected, probably because they were essential FRAND patents, the European Commission is opening an investigation against Samsung to assess if it “used certain of its standard essential patent rights to distort competition in European mobile device markets”, and failed to honor its commitment to the European Telecommunications Standards Institute to license those patents on fair and reasonable terms.

The European Commission could fine Samsung up to 10% of its global turnover if it is found guilty of breaching the rules. The fine could turn out to be a very hefty amount, in the tens of billions of dollars.